How the STOCK Act works — Congressional stock trading, plain English

Every U.S. Senator and Representative must disclose every stock trade within 45 days. That's the STOCK Act. Here's what it actually requires, what it doesn't, and how to read the disclosures.

What the law says

The Stop Trading on Congressional Knowledge Act(STOCK Act) was signed by President Obama in April 2012 after CBS 60 Minutes reported on apparent insider trading by Members. Its three main pillars:

• Insider-trading prohibition. Affirms that Members of Congress and their staff are subject to insider-trading laws — they cannot trade on material non-public information learned through their official duties.
• Periodic Transaction Reports (PTRs). Every security transaction over $1,000 by a Member, spouse, or dependent child must be disclosed within 45 days.
• Public access. Disclosures must be filed electronically and made publicly searchable on the House Clerk and Senate Office of Public Records websites.

What gets disclosed (and what doesn't)

Disclosed:

• Stocks (common, preferred, restricted)
• Bonds (corporate, municipal)
• Options, warrants, derivatives
• Mutual funds bought/sold (held funds aren't reported as transactions)
• ETFs
• Cryptocurrencies (added in 2018 guidance)
• Real estate transactions (separate annual disclosure)
• Trust transactions (with some blind-trust carve-outs)

Not disclosed (or limited):

• Exact dollar amounts — only ranges (see next section)
• Trades under $1,000
• Money market accounts
• U.S. Treasury bills and notes
• Holdings in qualified blind trusts (transactions still disclosed but not directed by the Member)

The dollar ranges (why exact amounts aren't shown)

Members disclose transaction value in standard brackets, not exact amounts:

• $1,001 — $15,000
• $15,001 — $50,000
• $50,001 — $100,000
• $100,001 — $250,000
• $250,001 — $500,000
• $500,001 — $1,000,000
• $1,000,001 — $5,000,000
• $5,000,001 — $25,000,000
• $25,000,001 — $50,000,000
• Over $50,000,000

This means a "$1M-$5M trade" could be anything from $1.0M to $5.0M. HoldLens reports the bracket low end as a conservative estimate — actual trade size could be 5× higher.

The 45-day clock

Members have 45 days from the transaction settlement date to file the PTR. Filings later than 45 days incur a $200 fine for the first offense, with the Ethics Committee able to impose larger penalties for patterns. In practice:

• ~75% of trades are filed within 30 days
• ~5-10% of trades are filed late (over 45 days)
• Patterns of late filing have triggered Ethics inquiries (Senators Burr 2020, Loeffler 2020, Perdue 2020)

How to read a disclosure

Each PTR contains:

• Filer — Member name, chamber, state
• Owner — self / spouse / dependent child / trust
• Asset — name + ticker + asset type
• Transaction type — buy / sell / partial-sell / exchange
• Transaction date — settlement date
• Notification date — when the Member was made aware
• Filing date — when the PTR was filed
• Amount — bracket from list above

Latency = filing date minus transaction date. >45 days = late. Notification-date ≠ transaction-date is common when trades are executed by trusts or money managers and reported back to the Member.

Where to read the source data

• U.S. House Clerk Financial Disclosures
• U.S. Senate Office of Public Records (eFD search)

Does Congressional trading actually outperform the market?

Studies are mixed. A 2011 paper by Ziobrowski et al. claimed Senators outperformed the market by ~12 percentage points annually (1993-1998 data). A 2019 Dartmouth working paper using more recent data (2012-2020) found no statistically significant excess return. Methodological choices about benchmarks and survivor bias drive much of the disagreement.

Anecdotal cases — Pelosi NVDA call options, Burr February 2020 sales pre-COVID — get media attention but are not statistical evidence of systematic outperformance.

Adjacent disclosures

• Form 4 corporate insider trades — what CEOs / CFOs / 10%+ owners trade in their own stock
• 13D / 13G activist filings — who's accumulating >5% of public companies
• 13F vs 13D vs 13G — the three SEC ownership disclosures

This is educational content, not investment advice. Congressional trading data is a transparency signal, not a forecast.